Quarterly Report • Aug 19, 2009
Quarterly Report
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Interim Financial Report of the Jenoptik Group for the months January to June 2009.
| Figures in million euros before Group charges | Jan.–June 2009 | Jan.– June 2008 | Change in % | April–June 2009 | April– June 2008 | Change in % |
|---|---|---|---|---|---|---|
| Sales | 231.3 | 264.5 | – 12.6 | 113.6 | 135.3 | – 16.0 |
| Lasers & Optical Systems | 74.1 | 107.6 | – 31.1 | 37.2 | 53.0 | – 29.8 |
| Metrology | 48.0 | 53.9 | – 10.9 | 23.7 | 28.0 | – 15.4 |
| Defense & Civil Systems | 105.2 | 100.7 | 4.5 | 50.8 | 53.1 | – 4.3 |
| Other** | 4.0 | 2.3 | 73.9 | 1.9 | 1.2 | 58.3 |
| EBITDA* | 15.0 | 30.7 | – 51.1 | 7.3 | 14.3 | – 49.0 |
| Lasers & Optical Systems | 1.9 | 19.8 | – 90.4 | 0 | 9.1 | – 100.0 |
| Metrology | – 1.2 | 0.8 | – 250.0 | – 0.1 | 1.2 | – 108.3 |
| Defense & Civil Systems | 11.4 | 8.7 | 31.0 | 4.8 | 4.6 | 4.3 |
| Other** | 2.9 | 1.4 | 107.1 | 2.6 | – 0.6 | 533.3 |
| EBIT before one-off effects | 3.3 | 16.1 | – 79.5 | 2.9 | 6.9 | – 58.0 |
| Lasers & Optical Systems | – 1.8 | 12.1 | – 114.9 | – 0.5 | 4.9 | – 110.2 |
| Metrology | – 3.2 | – 1.0 | – 220.0 | – 1.1 | 0.1 | – 1,200.0 |
| Defense & Civil Systems | 8.0 | 5.4 | 48.1 | 3.1 | 2.9 | 6.9 |
| Other** | 0.3 | – 0.4 | 175.0 | 1.4 | –1.0 | 240.0 |
| EBIT margin before one-off effects*** | 1.4 % | 6.1 % | 2.6 % | 5.1 % | ||
| Lasers & Optical Systems | – 2.4 % | 11.2 % | – 1.3 % | 9.2 % | ||
| Metrology | – 6.7 % | – 1.9 % | – 4.6 % | 0.4 % | ||
| Defense & Civil Systems | 7.6 % | 5.4 % | 6.1 % | 5.5 % | ||
| Other** | 7.5 % | –17.4 % | 73.7 % | – 83.3 % | ||
| One-off effects | – 7.9 | 0 | – 7.9 | 0 | ||
| EBIT* | – 4.6 | 16.1 | – 128.6 | – 5.0 | 6.9 | – 172.5 |
| Earnings before tax* | – 11.3 | 8.3 | – 236.1 | – 8.4 | 3.9 | – 315.4 |
| Earnings after tax* | – 11.1 | 6.3 | – 276.2 | – 8.4 | 3.1 | – 371.0 |
| Order intake | 218.1 | 267.6 | – 18.5 | 108.2 | 128.8 | – 16.0 |
| Lasers & Optical Systems | 80.1 | 112.5 | – 28.8 | 38.2 | 45.9 | – 16.8 |
| Metrology | 40.1 | 65.8 | – 39.1 | 20.2 | 34.6 | – 41.6 |
| Defense & Civil Systems | 94.3 | 87.0 | 8.4 | 47.9 | 47.3 | 1.3 |
| Other** | 3.6 | 2.3 | 56.5 | 1.9 | 1.0 | 90.0 |
| June 30, 2009 | Dec. 31, 2008 | June 30, 2008 | ||||
| Order backlog | 374.6 | 395.1 | 441.4 | |||
| Lasers & Optical Systems | 66.9 | 63.6 | 82.5 | |||
| Metrology | 27.3 | 37.0 | 41.3 | |||
| Defense & Civil Systems | 281.1 | 294.6 | 318.2 | |||
| Other** | – 0.7 | – 0.1 | – 0.6 | |||
| Employees (incl. trainees) | 3,354 | 3,400 | 3,397 | |||
| Lasers & Optical Systems | 1,349 | 1,412 | 1,423 | |||
| Metrology | 791 | 820 | 825 | |||
| Defense & Civil Systems | 1,079 | 1,100 | 1,086 |
* After one-off effects.
Other**
** Other includes holding, SSC, real-estate, consolidation.
135
68
63
*** EBIT as percent of sales.
As an integrated opto-electronic group, Jenoptik operates in the following five divisions
These five divisions are combined into the Lasers & Optical Systems, Metrology and Defense & Civil Systems segments and this consequently reflects the segment reporting.
Jenoptik is primarily a supplier of capital goods and therefore a partner for industrial companies. In the Traffic Solutions and Defense & Civil Systems divisions we are also a major supplier to the public sector, directly or indirectly through system integrators. Consumer markets do not form part of our focus.
Our product portfolio extends from complex systems, industrial facilities and production lines, to modules and subsystems, through to components. We also market comprehensive total solutions or operator models, comprising the integration of systems and facilities and their corresponding networking, as well as project management, data processing and after-sales.
Our key markets primarily include security and defense technology, the market for metrology and material processing, the civil aviation and aerospace industry, me -
dical technology, the traffic solutions technology market as well as digital imaging and the semiconductor industry.
Conditions in the capital market remained unsettled during the course of the 2nd quarter 2009 and continue to be influenced primarily by the financial and economic crisis. Following a very difficult start during the first months of the year, both the Dax as well as the TecDax have posted slight increases over the course of the past months. As at the end of the 1st half-year, at 4808.64 points, the Dax almost returned to the level at the start of the year; at 626.89 points, the TecDax actually recorded a marked rise over the level at the start of the year. The Jenoptik share failed to follow this upward trend. At 2.95 euros, the Jenoptik share re cord ed its lowest closing price on June 22, 2009 and it was not until July that it achieved a slight recovery, to 3.45 euros. The Jenoptik share posted its highest closing price in the period covered by the report on January 6, 2009 at 6.19 euros.
On the publication of the 2008 annual financial statements on March 27, 2009, the management gave a presentation of the figures and the outlook for the current fiscal year at the beginning of April at the annual Analysts' Conference in Frankfurt/Main. The management subsequently presented the 2008 figures at road-
| 1st half, 2009 | 1st half, 2008 |
|---|---|
| – 12,565 | 4,757 |
| 52,034,651 | 52,034,651 |
| – 0.24 | 0.09 |
| 889 | 1,129 |
| 55,659,076 | 56,918,070 |
| – 0.24 | 0.09 |
Earnings per share are the net profit divided by the weighted average number of shares outstanding. In calculating the diluted earnings per share the dilution effects are accounted for in deter mining the weighted average number of shares outstanding. The weighted average number of outstanding shares is adjusted for the effect of the options granted in the convertible bond assuming all options are exer cised. The diluted earnings per share were reduced to the lower un diluted earnings per share.
* After taking deferred taxes into account. ** Diluted
shows in Frankfurt. London, as well as in the USA, including in New York and Boston. Jenoptik also attend ed banking conferences in Frankfurt/Main and Hanover and gave a presentation of the Group in June 2009 during the Investors' Conference at the Laser 2009 trade fair.
At the JENOPTIK AG Annual General Meeting on June 3 in Weimar, all the items on the agenda were passed by a significant majority. With 28,084,885 shares with voting rights present, 53.97 percent of the nominal capital was represented. The Annual General Meeting was attended by approx. 350 shareholders.
According to the OECD economic forecast in June 2009, the global economic crisis has essentially flattened out. A recovery appears to have already begun also in most of the major non-OECD countries as a result of government aid.
The US economy is still coping with its worst recession for decades. According to the OECD report, the upturn will gradually begin in the second half of 2009 thanks to monetary and fiscal impetuses.
The Asiatic economies appear to be recovering more quickly than those in the OECD region. China in particular has had its growth rate forecasts raised by the OECD. This was triggered, on the one side, by a speedy implementation of the Chinese package of economic mea sures, and by a rapid rise in bank lending.
1st half 2009
In the s2nd quarter 2009, industrial production in the euro zone fell more sharply than in the previous months. According to the figures from the OECD, there are still no clear overall signs of a recovery. The reason for this is the varying situations in the individual member countries.
The mood in the German economy improved in the second quarter 2009 according to the Ifo business climate survey. Further development remains uncertain as a result of the high level of dependency upon exports. German exports in the first four months of 2009 fell by a record 23 percent compared with the same period in the previous year.
The development of the individual Jenoptik sectors is showing a varying pattern. At the beginning of July 2009, the sector association Spectaris presented the sector figures for 2008. Accord ing to these the sector of the optical, medical and mecha tronic technologies as a whole succeeded in increas ing sales by 3 percent last year. However, sales in the area of optical technologies were down by 2.5 percent. A marked reduction is expected for 2009 – 10 percent on the domestic side and 15 percent in exports.
The laser industry has been reporting falling sales since last autumn as many laser manufacturers are directly dependent upon other export-driven sectors such as machine construction and the automobile industry. It is expected to suffer a marked fall in the double figure percentage range in 2009.
Following the collapse of the semiconductor industry in the previous year, for the 3rd month in a row since May 2009 sales are once again on the increase accord -
ing to the sector association SIA. Nevertheless sales figures were still 23.3 percent below the level for the previous year. However the process of consolidation in the semiconductor market was still not over. In 2009, the level of investment in equipment by the sector is likely to be around half the level of 2008 according to Gart ner Inc. However, following an extremely weak start to the 1st quarter 2009, this will gradually pick up during the course of the year.
In the automotive market, Germany and France benefited from government incentive programs in the first half-year 2009 with the number of new vehicle re gis trations on the German domestic market increasing. Exports by contrast fell by 42 percent compared with the previous year according to information from the Federal Department of Statistics. In China, according to figures from the VDA, sales in the automotive industry rose by more than a half whilst in the USA they were down by more than one third. The crisis is primarily hitting suppliers.
In the machine construction industry, in May 2009 alone German machine construction companies posted a 48 percent fall in order intakes com pared with the level in the previous year according to information from the Verband Deutscher Maschinen- und Anlagenbau e.V. Exports in the first five months of the year reduced by 21.5 percent according to the German Department of Statistics.
The acceleration in falling prices benefited sales in the photovoltaics market, opening up an increasing number of potential customer groups. With German manufacturers of components, machines and plants for the
photovoltaics market already having posted a 60 percent increase in sales in the 1st quarter compared with the previous year, sales are anticipated to grow by a further 9 percent in the 2nd quarter. According to de tails from the VDMA the share of exports rose to 89 percent. As such, German manufacturers of components, machines and plants for the photovoltaics market reported a significant 34 percent recovery in order intakes compared with the 4th quarter 2008.
After a good 2008, sales in the aviation industry collapsed in the 1st half-year 2009. Orders for both Air bus and Boeing fell dramatically by comparison with the previous year. The International Air Transport Asso cia tion IATA has adjust ed its March 2009 forecast of losses for the year further downwards which is attribut able mainly to falling passenger numbers and freight volumes.
Last year, the German aerospace industry posted an increase of 1.7 billion euros. According to the Federal German government, Germany will continue to maintain its strong position in future aerospace programs. Nevertheless there are plans to make savings. This year, for example, major projects such as the European Galileo project will stagnate.
Up to now, the security and defense technology in dustry has not felt the effects of the economic crisis. According to information from the Stockholm Inter national Peace Research Institute (SIPRI), expenditure for military purposes in 2008 totaled 1,055 billion euros worldwide (increase of 4 percent). The German armaments industry benefited from this with the start of mass production of the Puma infantry fighting vehicle.
Note: The details on three segments in the report on the earnings situation as well as in the segment report ing can essentially be compared with the details in the report on the 1st half-year of the previous year. Differ ences due to Group charges and SSC (staff number) are explained separately.
Development of sales. As expected, in the 1st half-year 2009 the Jenoptik Group was unable to repeat the level of sales achieved in the previous year, instead posting a fall of 12.6 percent to 231.3 million euros (prev. year 264.5 million euros). The export quota, at approx. 56 percent, remained at almost the same level. Whilst the Lasers & Optical Systems and Metrology segments reported a fall in sales, the Defense & Civil Systems segment increased sales by 4.5 percent.
Development of earnings. The EBITDA in the 1st halfyear 2009 totaled 15.0 million euros (prev. year 30.7 million euros). For the first six months 2009, Jenoptik re corded a Group EBIT of minus 4.6 million euros (prev. year 16.1 million euros). This sum includes expenses from the one-off effect in the sum of 7.9 million euros resulting from the withdrawal from the mid-format camera business. The Group took this step as the result of the insolvency of a key supplier and the significant impairment of the business potential in the market for high-end digital photography. The one-off effect arising from this relinquishment of a business was included in full in the EBIT of the 2nd quarter 2009 and primarily consisted of non-cash value adjustments. The EBIT of Other (holding, SSC, real estate, consolidation) was 0.3 million euros in the 1st half year (prev. year minus 0.4 million euros). The EBIT of Other includes positive effects from the release of provisions as a result of an incoming receivable in the sum of almost 2 million euros. In the 1st quarter 2009 these were compensat ed by negative effects from the business with mid-format cameras.
Due to the one-off effects the Jenoptik Group shows additionally the development of results before the oneoff effects in the section below.
Development of results before one-off effects. The earnings of the Jenoptik Group improved in the 2nd quarter compared with the 1st quarter but compared with the same period in the previous year are charac terized by the reduction in sales due to the economic crisis. In the 1st half-year 2009, the figure before oneoff effects was 3.3 million euros (prev. year 16.1 million euros).
The Group EBIT before one-off effects in the 2nd quarter totaled 2.9 million euros as against 0.4 million euros in the 1st quarter of the current fiscal year. This increase was due to improv ed earnings in the Lasers & Optical Systems and the Metrology segments in the 2nd quarter 2009. Seen over the full half year, both
| Sales | in million euros | ||
|---|---|---|---|
| 1.1. to 30.6.2009 |
1.1. to 30.6.2008 |
Change | |
| Total | 231.3 | 264.5 | – 12.6 % |
| Lasers & Optical Systems | 74.1 | 107.6 | – 31.1 % |
| Metrology | 48.0 | 53.9 | – 10.9 % |
| Defense & Civil Systems | 105.2 | 100.7 | 4.5 % |
| Other | 4.0 | 2.3 | 73.9 % |
| EBIT in million euros |
|||||
|---|---|---|---|---|---|
| 1.1. to 30.6.2009 |
1.1. to 30.6.2008 |
Change | |||
| Total | 3.3 | 16.1 | – 79.5 % | ||
| Lasers & Optical Systems | – 1.8 | 12.1 | –114.9 % | ||
| Metrology | – 3.2 | – 1.0 | –220.0 % | ||
| Defense & Civil Systems | 8.0 | 5.4 | 48.1 % | ||
| Other | 0.3 | – 0.4 | 175.0 % | ||
| * before Group charges |
segments posted a nega tive EBIT. This was offset by the Defense & Civil Systems segment, which recorded a 48.1 percent rise in earn ings compared with the same period in the previous year. The Group EBIT in the 1st half-year came in at 3.3 million euros as against 16.1 million euros in the previous year, 1.8 million of which came from one-off earnings arising from real estate in the previous year. As expected, the fall in earnings of the Lasers & Optical Systems segment was particularly heavy due to the continuing crisis in the semiconductor industry and the automotive business, which also had a negative impact on the Metrology segment. With a lower volume of sales, the competi tion for the remaining business is becoming increasingly intensive.
The net financial result totaled minus 6.7 million euros (prev. year minus 7.8 million euros) thanks to an im provement both in the net investment and net interest results. The net investment result for the previous year still included losses arising from Xtreme technologies GmbH, the entire shareholding in which had been sold in full by Jenoptik in May 2008. The net interest result improved due to lower interest costs. Jenoptik benefited from lower short-term interest rates. However, the average interest costs for the Jenoptik Group will rise during the remainder of the year due to taking out mid-term credits to repay short-term credits.
As a result of the lower Group EBIT and the one-off effects, earnings before tax totaled minus 11.3 million euros (prev. year 8.3 million euros). There were virtually no taxes incurred. Non-cash deferred tax income
totaled 0.3 million euros compared with deferred tax expenses for the same period in the previous year in the sum of 0.9 million euros. Earnings after tax totaled minus 11.1 million euros (prev. year 6.3 million euros). Excluding the one-off effects arising from the business withdrawal, earnings after tax would have totaled approx. minus 3.2 million euros.
Order book situation. The effects of the financial and economic crisis were reflected in the Jenoptik Group's order intake, which fell by 18.5 percent to 218.1 million euros (prev. year 267.6 million euros). After reaching 109.9 million euros in the 1st quarter the order intake in the 2nd quarter remained at the same level at 108.2 million euros. As with sales, the order intake of the Defense & Civil Systems segment benefited from a stable to good market situation and posted an increase. The order intake of the other two segments was down sharply compared with the same period in the previous year. As the result of a reduction in the order intake as against sales in the period under review (book-to-bill rate: 0.94), the Group order backlog fell by 5.2 percent compared with the end of 2008, to 374.6 million euros (Dec. 31, 2008: 395.1 million euros).
Detailed information on the development of the key indicators of the segments can be found in the segment reporting from p. 13 of this report.
Change – 5.2 % 5.2 % – 26.2 % – 4.6 % – 600.0 %
| Order intake | in million euros | Order backlog | in million euros | ||||
|---|---|---|---|---|---|---|---|
| 1.1. to 30.6.2009 |
1.1. to 30.6.2008 |
Change | 30.6.2009 | 31.12.2008 | Change | ||
| Total | 218.1 | 267.6 | – 18.5 % | Total | 374.6 | 395.1 | – 5.2 % |
| Lasers & Optical Systems | 80.1 | 112.5 | – 28.8 % | Lasers & Optical Systems | 66.9 | 63.6 | 5.2 % |
| Metrology | 40.1 | 65.8 | – 39.1 % | Metrology | 27.3 | 37.0 | – 26.2 % |
| Defense & Civil Systems | 94.3 | 87.0 | 8.4 % | Defense & Civil Systems | 281.1 | 294.6 | – 4.6 % |
| Other | 3.6 | 2.3 | 56.5 % | Other | – 0.7 | – 0.1 | – 600.0 % |
Cost of sales fell by 10.1 percent to 169.1 million euros (prev. year 188.0 million euros) due to the reduction in sales. As a result of the change in the sales mix, the delayed effect of cost reduction measures and the current level of fixed costs with a reduced capacity utilization, selling expenses fell at a slightly lower rate proportional to the reduction in sales. Cost reduction measures within the framework of the Jenoptik Excellence Program are expected to take effect starting from the 2nd half-year 2009. The gross margin fell to 26.9 percent (prev. year 28.9 percent). Selling and general adminis trative expenses were down by 6.4 and 5.0 percent respectively.
Research and development expenses, at 15.7 million euros, remained at the same level as in the previous year (prev. year 15.3 million euros). This figure does not include developments in the sum of 9.4 million euros (prev. year 9.9 million euros) which are directly apportionable to customers and are shown as selling ex penses. The costs for the development of fiber lasers, the key development project in the Lasers & Material Processing division, are included in the investment result on a proportional basis via the joint venture JT Optical Engine GmbH & Co. KG. The costs do also not include expenses resulting from depreciation on devel opment costs in connection with the relinquishment of the mid-format camera business which were shown separately as part of the expenses from one-off effects.
The Group R+D quota, the ratio between R+D expenses and sales, increased to 6.8 percent as a result of the reduction in sales (prev. year 5.8 percent).
Employees & management. The number of employees in the Jenoptik Group fell by 46 to 3,354 (as of Dec. 31, 2008: 3,400). The effects resulting from the relinquishment of the business with mid-format cameras and the initiated closing of the optics site in Gießen will show in the 2nd half-year. Transfers between the segments and Other after the end of 2008 took place as a result of employees being switched to the Jenoptik-Shared-Service-Center (SSC) which commenced its operating activities on January 1, 2009 with a total of 66 personnel. These employees are no longer included in the staff figures of the segments but in the figure of Other.
Adjustments to the reduction in capacity utilization in individual areas of Jenoptik, mainly in the Optical Systems and Industrial Metrology divisions, were carried out through the reduction in the amount of temporary personnel as well as the introduction of short-time working. As of June 30, 2009, a total of 687 employees were on short-time working within the Jenoptik Group in Germany; they have had their work ing hours reduced by between 10 and 25 percent. 24 employees of the Optical Systems division at the Jena site took part in professional training programs within the framework of short-time working.
Jenoptik reached a strategic milestone for vocational training at the sites in Thuringia. In April 2009, JENOPTIK AG joined SCHOTT JENAer GLAS GmbH and
| 30.6.2009 | 31.12.2008 | Change | |
|---|---|---|---|
| Total | 3,354 | 3,400 | – 1.4 % |
| Lasers & Optical Systems | 1,349 | 1,412 | – 4.5 % |
| Metrology | 791 | 820 | – 3.5 % |
| Defense & Civil Systems | 1,079 | 1,100 | – 1.9 % |
| Other | 135 | 68 | 98.5 % |
Carl Zeiss Jena GmbH as the third shareholder in the Jena Training Center, which is responsible for providing apprentice training in the optical, precision mechanical, electronic and commercial professions, for giving career advice and guidance on course selection as well as for the retraining, further training, qualification and ad vanced training in the area of adult education and training within the region in and around Jena. From September this year, the seven new trainees at the Thuringian sites as well as the four students of the Career Academy will be carrying out their practical modules for the first years' training at the Jena Training Center – Schott. Carl Zeiss. Jenoptik". Jenoptik will benefit from the excellent equipment and concentra tion of know-how on all aspects of the training for the careers which are relevant to Jenoptik at the Training Center. Within the Group 28 trainees and four students started throughout Germany in August this year.
Financing structure. As a result of the periods of credit being extended, the Group's non-current liabilities increased by 15 million euros or 11.3 percent as against end 2008, to a total of 148.1 million euros (Dec. 31, 2008: 133.1 million euros). In return, current financial liabilities to banks reduced by 19.8 million euros (Dec. 31, 2008: 113.7 million euros). Current liabilities of the Jenoptik Group showed an overall reduction of 27.1 million euros or 10.3 percent, helped also by lower provisions. With a debt level of 1.37, the ratio between borrowings (384.1 million euros) and shareholders' equity (279.9 million euros) was slightly up on the level for the full year 2008 (Dec. 31, 2008: 1.35).
Net debt of the Jenoptik Group, at 188.5 million euros as of June 30, 2009, was slightly below the figure for the full year 2008 (as of Dec. 31, 2008: 191.6 million euros).
Analysis of capital expenditure. In the 1st half-year 2009, the level of capital expenditure in intangible assets and tangible assets, in the total sum of 7.8 million euros, was lower than in the same period for the previous year (prev. year 10.2 million euros). At 5.2 mil lion euros, tangible assets accounted for more than two thirds of the total investment, the key items being on-account payments and investments in factory and office equipment.
Investments were offset by standard depreciation in the sum of 14.3 million euros (prev. year 14.6 million euros).
The cash flows in the year 2009 in the analysis of cash flows can be compared fully with those of the previous year.
At 12.5 million euros, the cash flow from operating activities was again in the double-digit million euros range in spite of the negative earnings before tax (prev. year 16.5 million euros). The main reason for this positive development was the active management of accounts receivable and inventories within the framework of the Jenoptik Excellence Program which
resulted in a disproportio nate reduction in trade accounts receivable.
In the 1st half-year 2009, the cash flow from investing activities totaled minus 6.7 million euros (prev. year minus 5.3 million euros). It was marked by a reduction in payments for investments in tangible assets in the sum of 5.2 million euros (prev. year 7.4 million euros) as well as the reduction in receipts from disposals of tangible assets in the sum of 0.4 million euros (prev. year 3.4 million euros resulting from the sale of smaller real estate not needed for operations).
The cash flow from financing activities was minus 4.1 million euros (prev. year minus 12.1 million euros). This is mainly attributable to lower repayments for finance leases as well as to changes in the group financing.
The free cash flow was therefore 5.6 million euros (prev. year 10.5 million euros).
Balance sheet analysis. The balance sheet total of the Jenoptik Group as of June 30, 2009, reduced to 664.1 million euros (Dec. 31, 2008: 689.1 million euros). This resulted from a reduction in both current and non-current assets.
During the course of the relinquishment of the business with mid-format cameras, non-current assets reduced to 361.5 million euros (Dec. 31, 2008: 376.3 million euros). Intangible assets fell as a result of value adjustments (impairments) particularly to development costs. There was also a slight reduction in tangible assets
since depreciation primarily in the real estate area was higher than capital expenditure made. At 18.5 million euros, there was virtually no change in financial assets, includ ing shares in associated companies (Dec. 31, 2008: 20.2 million euros).
At 302.6 million euros, current assets were slightly lower than at the end of 2008 (Dec. 31, 2008: 312.8 million euros). This reduction was mainly attributable to lower receivables and other assets thanks to the im proved receivables management and lower sales. At 179.1 million euros, inventories remained virtually un changed (Dec. 31, 2008: 179.5 million euros). Cash and cash equivalents increased slightly to 13.8 million euros (Dec. 31, 2008: 12.5 million euros).
The working capital, defined as total receivables arising from the operating business activity and inventories, less liabilities to suppliers, liabilities arising from PoC (Percentage of Completion) and on-account payments received, was lower at 195.7 million euros, primarily as a result of the reduction in trade accounts receivable (Dec. 31, 2008: 201.6 million euros).
As a result of the included loss, the Group sharehold er's equity fell by 12.9 million euros to 279.9 million euros (Dec. 31, 2008: 292.8 million euros). Since there was a simultaneous reduction in the balance sheet total, the shareholders' equity quota, the ratio between shareholders' equity and balance sheet total, showed only a slight fall from 42.5 percent as at end 2008 to the new figure of 42.2 percent.
| Net debt | in million euros | ||
|---|---|---|---|
| 30.6.2009 | 31.12.2008 | 30.6.2008 | |
| Total | – 188.5 | – 191.6 | – 192.0 |
| Securities | 1.5 | 2.0 | 2.3 |
| Cash and cash equivalents | 13.8 | 12.5 | 12.3 |
| Non-current financial liabilities | 109.9 | 92.4 | 141.9 |
| Current financial liabilities | 93.9 | 113.7 | 64.7 |
Some of the current liabilities to banks were converted into several three-year loans. This led to a rise in noncurrent financial liabilities to 109.9 million euros (Dec. 31, 2008: 92.4 million euros). Non-current liabilities therefore also increased to a total of 148.1 million euros (Dec. 31, 2008: 133.1 million euros). There were only minor changes in the pension liabilities, other noncurrent provisions and other non-current liabilities.
As a result of the conversion of current financial liabilities to banks to non-current liabilities mentioned above as well as the positive cash flow, current liabilities fell by 27.1 million euros to 236.0 million euros (Dec. 31, 2008: 263.1 million euros). Another contributory factor in this reduc tion was liabilities arising from the operating business activities, which reduced to 70.0 million euros.
Purchases and sales of companies. In July 2009, in conjunction with the Korean company Telstar-Hommel Corp., JENOPTIK AG formed the joint venture company JENOPTIK Korea Corp. which will primarily be targeting the Asiatic electronics, flat-panel and photovoltaics industries. JENOPTIK AG is the majority shareholder in this joint venture, with 66.6 percent of the shares. In March 2009, JENOPTIK AG formed JENOPTIK OptiSys Ltd. in conjunction with the Israeli company Dagesh, with both partners each holding 50 percent of the shares.
The Group also relinquished its mid-format camera business.
There were no purchases or sales of companies in the second quarter of the current fiscal year.
For information on assets and liabilities not included in the balance sheet, we refer to the information on page 72 as well as the information on guarantees in the Risk Report from page 87 of the 2008 Annual Report.
Note: The details on the three segments in the report on the earnings situation as well as in the segment report ing can be compared in full with the details in the report on the 1st half-year 2008. For this reason the EBIT of the segments before group charges was shown both in the comments as well as in the table on the cover page.
The Lasers & Material Processing and Optical Systems divisions are combined within this segment. Both divi sions felt the impact of the global economic crisis in the 1st half-year. Sales, earnings and order intakes are therefore below the levels for the previous year. The results of the segment were influenced by the one-off effects arising from the withdrawal from the mid-format camera business. In line with the details for the Group as a whole, the development of results before one-off effects will therefore be shown separately.
Sales in the 1st half-year 2009 totaled 74.1 million euros (prev. year 107.6 million euros), with both divisions contributing to the 31.1 percent reduction. The Optical Systems division continues to be affected by the on going crisis in the semiconductor industry, although there were signs in the 2nd quarter 2009 that the crisis is 'bottoming out'. The low level of demand from the automotive and industry business was reflected in the Lasers & Material Processing division. The development in the areas of photovoltaics and medical technology, however, was stable.
The result from operating activities before one-off effects, reflecting the reduction in sales, totaled minus 1.8 million euros (prev. year 12.1 million euros). The earnings situation improved slightly in the 2nd quarter 2009, at minus 0.5 million euros compared with minus 1.3 million euros in the 1st quarter of the current fiscal year. The one-off effects in the sum of 7.9 million euros, as a consequence of the withdrawal from the mid-format camera business and described in the overall group results, impacted in full on the Lasers & Optical Systems segment.
There was no reversal of the trend in the order book situation but there was a slight improvement in the economic situation, particularly in the semiconductor industry. The segment's order in takes, at 80.1 million euros, were 28.8 percent down on the figure for the same period in the previous year (prev. year 112.5 mil lion euros) but, in the 2nd quarter, remained at the same level as the 1st quarter. As a result of the higher order intake compared to sales, the book-to-bill rate totaled 1.08 in the period under re view. The order backlog rose by 5.2 percent as against Dec. 31, 2008, to 66.9 million euros (Dec. 31, 2008: 63.6 million euros).
With several order intakes for photovoltaic systems in the Lasers & Material Processing division, Jenoptik remains a partner for this growth sector. With its laser technology, more efficient than conventional processes, as well as the know-how it now possesses on all aspects of thin-film photovoltaics and the separating and structuring of silicon wafer solar cells, Jenoptik is benefiting from the trend in the sector towards the optimization of costs.
| Lasers & Optical Systems Segment | in million euros | ||
|---|---|---|---|
| 30.6.2009 | 30.6.2008 | Change | |
| Sales | 74.1 | 107.6 | – 31.1 % |
| EBIT* | – 1.8 | 12.1 | –114.9 % |
| Order intake | 80.1 | 112.5 | – 28.8 % |
| Order backlog | 66.9 | 63.6** | 5.2 % |
| Employees | 1,349 | 1,412** | –4.5 % |
* before Group charges and one-off effects ** Figures as at December 31, 2008
The number of employees in the segment, at 1,349 as of June 30, 2009, fell by 63 or 4.5 percent (Dec. 31, 2008: 1,412). The reduction is essentially attributable to the reduction in staff figures abroad and well as the bad development of the mid-format camera business which was relinquished in July. In addition, some of the segment's employees now work in the Jenoptik Shared Service Center and therefore are no longer included in the segment figure but in Other. Since January 2009, around 530 employees in the segment have been on short-time working, their number of working hours having been reduced by between 10 and 25 percent.
The Lasers & Material Processing division strengthen ed its activities in Asia. At the beginning of July, in conjunction with Telstar-Hommel Corp., Jenoptik form ed the joint venture JENOPTIK Korea Corp. which will primarily be targeting the Asiatic electronics, flat-panel and photovoltaics industry. JENOPTIK AG has a majority 66.6 percent holding in the company which is based in Pyeongtaek (province of Gyeonggi). By the beginning of next year, the partners will be jointly building a local laser application center and investing approx. 4.4 mil lion US dollars. It is expected to open at the beginning of 2010 and will be geared towards the whole of the Asiatic market. At this center, Jenoptik will present various laser material processing systems for processing brittle materials such as display glass, solar cells, ceramics and silicon wafers as well as the special laser sepa ration process used on these materials, so-called TLS dicing (TLS = Thermal Laser Beam Separa tion). Customers will be able to test the systems and further optimize them for own production processes.
The Optical Systems division continued to focus its business in the 1st half-year 2009. This process covered the division's business portfolio, the corporate bases and its locations.
In the US American market, the division amalgamated the two subsidiaries Coastal Optical Systems, Inc., Jupiter (Florida) and Liebmann Optical Co., East hamp ton (MA) with effect from July 1 this year, to form JENOPTIK Optical Systems Inc. The company, whose headquarters are in Jupiter has a total of approx. 100 employees. Its main customers include the US Ameri can defense, medical technology as well as show and entertainment industries. Liebmann became part of the Jenoptik Group in 1999, Coastal in 2002. Within the framework of the Group's strategic realign ment, the amalgamation of the activities of the two companies was intensified.
Since March 2009, the Optical Systems division has had a direct presence in the Israeli market through a joint venture company. Together with the Israeli company Dagesh, it formed JENOPTIK OptiSys Ltd., which will supply opto-mechanical modules to Israeli customers in the semiconductor and security industry. Dagesh and Jenoptik each hold 50 percent of the shares. As a systems company, JENOPTIK OptiSys will offer the design, installation, alignment and testing of complete modules. There are plans to invest in cleanroom production environments.
A cooperation arrangement with the firm of LightTrans will expand Jenoptik's range of micro optical components and systems that LightTrans will in future design
-- Consistent continuation of internationa lization.
exclusively for Jenoptik. Through this cooperation arrangement, Jenoptik will be expanding its solutions expertise as well as its resources in the growth market of micro optics. In addition to the existing core markets of the semiconductor industry, Healthcare & Life Scien ces as well as materials processing, Jenoptik will now be able to increasingly attract new customer groupings and develop new areas of application such as, for example, in modern lighting and display technology.
The Metrology segment comprises the Industrial Metrology and Traffic Solutions divisions. The effects of the crisis in the automotive industry were able to be partially offset by the smaller but more stable Traffic Solutions division.
Sales in the Metrology segment reduced by 10.9 percent compared with the figure in the previous year, to 48.0 million euros (prev. year 53.9 million euros). The Industrial Metrology division posted a sharp fall in sales, particularly in the 2nd quarter, whilst in the 1st quarter of this year it had still benefited from the order backlog from the period before the crisis. By contrast, the Traffic Solutions division recorded a marked in crease in sales in the 2nd quarter.
The result from operating activities (EBIT) totaled minus 3.2 million euros (prev. year minus 1.0 million euros). 2.1 million euros of this were generated in the 1st quarter, consequently there was a marked reduction in the segment's losses in the 2nd quarter. This was
attributable to an improved result in the Traffic Solu tions division despite the continuing nega tive impact on results arising from the development of the new business area Traffic Service Providing.
The order book situation of the Metrology segment reflected the crisis in the automotive industry which is primarily hitting suppliers. Order intakes fell by 39.1 percent to 40.1 million euros (prev. year 65.8 million euros). By comparison with the 1st quarter 2009, however, the segment's order intake remained stable – albeit at a very low level. The segment's book-to-bill rate was 0.84, its order backlog therefore reduced further to 27.3 million euros (Dec. 31, 2008: 37.0 mil lion euros).
The number of employees as at June 30, 2009 totaled 791 compared with 820 at the end of 2008. The reduction is attributable not only to the operational startup of the Jenoptik Shared Ser vice Center but primarily also to the reduction in the number of employ ees in Germany and abroad. A total of 161 employees in the Industrial Metrology division have been on shorttime working throughout Germany since April this year.
The Industrial Metrology division strengthened its international presence with the acquisition of parts of the Chinese company Shanghai AES Auto Equipment Co. Ltd. in February 2009. With the takeover, the divi sion has expanded, in particular, its assembly capacities for industrial metrology and its procurement know-how in respect of electronic and mechanical components. These new parts of the company are currently being amalgamated with the division's existing activities in
| Metrology Segment in million euros |
|||||
|---|---|---|---|---|---|
| 30.6.2009 | 30.6.2008 | Change | |||
| Sales | 48.0 | 53.9 | – 10.9 % | ||
| EBIT* | – 3.2 | – 1.0 | –220.0 % | ||
| Order intake | 40.1 | 65.8 | – 39.1 % | ||
| Order backlog | 27.3 | 37.0** | –26.2 % | ||
| Employees | 791 | 820** | – 3.5 % | ||
| * before Group charges and one-off effects ** Figures as at December 31, 2008 |
China. AES, with registered offices in Shanghai, was formed in 2004 and specializes in, among other things, the development, assembly and sale of industrial metrology and assembly technology for the Chinese automotive industry.
The Defense & Civil Systems segment comprises the division of the same name and in the 2nd quarter 2009 continued its successful development of business within a market environment that remains stable to good.
Sales in the segment rose by 4.5 percent to 105.2 million euros (prev. year 100.7 million euros). However, the growth in sales was generated during the 1st quarter of this year, during which the Sensors business unit benefited from the delivery of a major order in the security technology area which was concluded in the 2nd quarter. Contributions to the good per formance also came from the Mechatronics and Optro nics business units.
The segment's result from operating activities (EBIT) posted a higher increase in proportion to the growth in sales. This improved by 48.1 percent to 8.0 million euros (prev. year 5.4 million euros), here again the main contribution came from the Sensors business unit as the result of economies of scale within the framework of the major order.
The order intake rose by 8.4 percent to 94.3 million euros (prev. year 87.0 million euros). With this business, in which major and long-term orders are a character istic feature, the analyses on the qualifying date can be distorted by fluctuations during the course of the year. Among other things, there were also orders for the supply of power to tracking systems for military use, train electricity supply systems as well as for Airbus components. In the period under review, the segment's order backlog fell slightly as a result of a slight increase in the volume of sales compared with the order intake (book-to-bill rate: 0.90) to 281.1 million euros (Dec. 31, 2008: 294.6 million euros).
The business for the new PUMA infantry fighting tank of the Bundeswehr, which is worth approx. 70 million euros, made an important step forward for Jenoptik at the beginning of July with the signing of the procurement contract with the Federal Department for Defense Technology and Procurement (BWB) in Koblenz. Orders are expected to be received in the 2nd half-year 2009 and the first contributions to sales in the 2010 fiscal year. The overall project has been awarded to PSM GmbH, Kassel, in which Rheinmetall and Krauss-Maffei Wegmann each hold 50 percent of the shares. The Jenoptik Defense & Civil Systems division will be supplying systems and components such as, for example, for energy supply and stabilization in close cooperation with its project partners Krauss-Maffei Wegmann GmbH & Co. KG, Rheinmetall Landsysteme GmbH, MTU Fried richshafen as well as PSM GmbH, Kassel which has been given charge of the overall project.
The number of employees in the segment reduced by 21 to 1,079 (De c. 31, 2008: 1,100) essentially as the result of employees being transferred to the SSC.
| Defense & Civil Systems Segment | in million euros | ||||
|---|---|---|---|---|---|
| 30.6.2009 | 30.6.2008 | Change | |||
| Sales | 105.2 | 100.7 | 4.5 % | ||
| EBIT* | 8.0 | 5.4 | 48.1 % | ||
| Order intake | 94.3 | 87.0 | 8.4 % | ||
| Order backlog | 281.1 | 294.6** | –4.6 % | ||
| Employees | 1,079 | 1,100** | –1.9 % | ||
| * before Group charges and one-off effects ** Figures as at December 31, 2008 |
There were no significant events occurring after the end of the period under review since the effects result ing from the relinquishment of the business with midformat cameras were completely included in the figures of the first half-year. Individual developments in the current 3rd quarter have already been dealt with within the framework of this report.
Within the framework of the risk report, we refer to the information on pages 87 to 96 of the Annual Report 2008 published at the end of March 2009. Up to the editorial closing date of this interim report, there have been no major changes in the risks described in this report during the course of the 1st half-year 2009, with the exception of the specifics set out below.
The economic conditions deteriorated further during the course of the 1st quarter 2009. There was no major change during the course of the 2nd quarter 2009. However, economic experts believe that individual sectors, including the semiconductor industry, have 'bottomed out' and forecast a pickup in the 2nd half-year 2009 – albeit at a low level. For this reason, we are keeping to our forecast of May this year that there has been an increase in the risks described on pages 89 and 90 in the 2008 Group Management
Report with regard to financing and the cyclical nature of key individual markets.
In terms of the financing risks, we continue to see the market for corporate credit as problematic. As at June 30, 2009, the Group had unused lines of credit avail able in the sum of 87.6 million euros (Dec. 31, 2008: 79.2 million euros). During the course of the 1st half-year 2009, short-term credit guarantees were extended for a medium term period and in doing so 23 million euros were taken up as mid-term loans. The residual balance of the convertible bond was completely repaid as at July 23, 2009. Negotiations on further conversions of short-term credits to long-term loans are currently being finalized.
With regard to the sector-related risks, the falling demand from the automobile industry continued in the 1st quarter 2009 and stagnated at a very low level in the 2nd quarter just past. This development of orders to-date has led since May this year to sharp falls in sales and results in the Industrial Metrology division. At the start of the year, in particular, the division had continued to benefit from the existing order backlog from the year 2008. The demand from the semiconductor industry further stabilized at the very low level recorded in the 4th quarter 2008. The latest forecasts predict a pickup in the sector in the 2nd half-year 2009, which could also lead to a rise in demand for semiconductor equipment providers.
The risk that had arisen from the insolvency proceed ings involving Franke & Heidecke GmbH, Brunswick as
a key supplier for Jenoptik's mid format camera business has almost completely disappeared with the decision by Jenoptik to withdraw from this business. The withdrawal, which was also carried out with the longterm problematic development of the market in mind, produced one-off expenses in the sum of 7.9 million euros which were included in full in the 2nd quarter result. Existing supply commitments with the customer were terminated by mutual agreement.
The application for protection from creditors under Chapter 11 by Asyst Technologies Inc., Jenoptik's former adversary in the litigation proceedings, will not have any material effects on Jenoptik. A ruling on the case, which had been litigious for more than ten years, was finally issued in favor of Jenoptik last year.
A crisis team set up in the 2nd quarter will analyze the risk arising from a worldwide spread of swine flu and an associated higher than average level of sickness amongst the workforce over a longer period. Local crisis teams have been set up at the Jenoptik Group's locations. Analyses will be conducted of internal operat ing procedures and their coordination with a reduced number of employees, taking into account the standards and requirements set by the authorities.
Despite the global economic downturn, we believe that the long term conditions are good for sales of our products and services once the crisis is over. Thanks to the Group's strategic realignment and the package of measures that we have defined and will be implement ing for 2009 and 2010, we see ourselves as being well placed.
Jenoptik aims to further expand its position as one of the world's leading providers of optoelectronic products and services. In order to achieve this, we have defined specific, long-term targets which are described in detail on pages 103 to 105 of the 2008 Annual Report.
Cost reduction measures were introduced within the Group as part of the strategic realignment and as a consequence of the financial and economic crisis. In the whole year 2009 these are expected to generated cost savings of more than 10 million euros which will contribute to the reduction in fixed costs and therefore partially compensate for the decrease in sales and margins. The measures include:
-- Cost reduction measures introduced.
Jenoptik Excellence Program was started up in January 2009 in order to improve the cost structures through out the Group on a sustainable basis. It entails the comprehensive and permanent optimization of processes to reduce costs and for quality assurance purposes, the further consolidation of the divisional structure as well as the setting of group-wide process standards that increase both efficiency and quality. The analysis phase of the Jenoptik Excellence Program was completed in March. Implementation began in the 2nd quarter 2009, starting with those themes that will have the greatest positive effects. These essentially include group purchasing as well as the optimization of the produc tion processes.
The Shared Service Center started up its operational duties in January 2009. These currently cover the topic areas of information technology (IT), HR, group pur chasing, real estate management, health and safety at work and environmental protection, security and technical services and are expected to be expanded on a step-by-step basis over the years ahead. The current focus is on harmonizing the Group IT. One of the key steps in this process was the commissioning of a new central Computer Center as well the group network.
Our view of the future development of the segments assumes that there will be a general recovery in the markets which have been affected to varying degrees by the crisis. It is impossible at this point in time to
forecast to what extent the economic crisis will have a long term effect on the general market trends.
In the Lasers & Optical Systems segment, the duration and extent of the current crisis in the semiconductor industry and the development of its related industries will have a major influence on the course of business particularly in the Optical Systems division. In the Lasers & Material Processing division, success will depend upon, among other things, a rapid and successful market launch of new developments. The Group attaches great importance to the photovoltaics and medical technology market as well as the new development of the fiber laser and thus the entry into new markets of laser material processing.
In the Metrology segment, the duration and extent of the crisis in the automotive industry will have a significant effect on the course of business over the coming quarters. We expect to see a return to the market volumes of 2008 or 2007 in the medium term. Measures aimed at adjusting the cost structures were taken and extended in 2008. In future however, the Industrial Metrology division will benefit from the global demand for fuel-saving, low emission engines. The Traffic Solu tions division is asserting its position in a market which remains stable. As a global market leader in traffic solutions technology, the division is benefiting from a comprehensive product portfolio in the Equipment business unit. In the long term, the Traffic Service Providing business unit will benefit from the trend amongst public sector customers towards Public Private Partnership models.
The Defense & Civil Systems segment is operating in what is essentially a stable market environment. The reasons for this are the standard methods for awarding major contracts which can extend over periods of ten years or more. This applies in particular to the Mecha tronic and Optronic business units, areas in which Jenoptik supplies systems companies and has long standing and intensive relationships with its customers. Throughout the division and particularly in the Sensors business unit, we have seen the trend towards security systems – both in the civil as well as the military area.
The growth forecasts issued by the OECD for the global economy were revised upwards for the first time in two years. Following an anticipated minus 4.1 percent collapse this year, total GDP in 2010 is expected to show a small rise again of 0.7 percent. The reason for this, according to the OECD, is the impact of the monetary and fiscal policy instruments of various governments. However, not every region will experience the same level of economic recovery.
According to the OECD report, the upturn in the US economy should gradually take hold in the second half of 2009 as a result of monetary and fiscal impetuses. Following an overall fall in US GDP of 2.5 percent in 2009, the IMF expects the US economy to grow by 0.75 percent in 2010.
By contrast, according to the OECD report there will still be no signs of a significant recovery in the euro zone even in 2010. Following the forecast 4.8 percent fall in GDP in the current year, it is currently being predicted that economic output will stagnate in 2010. The main reasons for this are shrinking exports and the situation in the financial markets.
The forecasts for the German economy are equally cautious in view of the country's extensive dependency upon exports. In the longer term, however, experts expect the German economy to benefit from the pick up in global economic activity and regain lost global market shares.
Following a further fall of 10 percent in the domestic market and 15 percent in exports in 2009, the sector association Spectaris anticipates a recovery in the market for optical technologies over the medium term, as this is one of the most innovative sectors. After report ing a sharp fall in order intakes, the laser sector also predicts a marked reduction in sales for 2009. The VDMA Working Group on Lasers and Laser Systems for Material Processing anticipates a double figure reduc tion in sales of industrial lasers.
The prospects for the second half of 2009 for the semiconductor industry are good, with sales expected to increase by 18 percent compared with the 1st halfyear according to the analysts of IC Insights. For 2010 and 2011, the sector association SIA anticipates a growth in the chip sector of 6.5 percent respectively.
However the process of consolidation in the market had not yet ended. In line with this development, the sector association SEMI forecasts an increase in investment in new fabs. It correspondingly expects to see a 90 percent increase in equipment spending in 2010, although this high growth is attributable to the very low level in 2009.
The solar sector is optimistic. The German Federal Association of the Solar Industry still expects a noticeable pickup in the market in 2009. The Desertec project represents an amalgamation of leading Euro pean companies which will give a further boost to the sector.
According to the Verband der Automobilindustrie (VDA), the crisis in the German automotive industry is not yet over, although the decline is being halted. According to information from the Federal German Ministry for Trade and Technology the situa tion has calmed down as a result of the continuing government measures, but these have only postponed the problems. There is consequently not expected to be any significant improvement in the sector situation, even in 2010.
The forecast by IATA for the aircraft industry for the full year 2009 is a worldwide 15 percent reduction in sales. The major manufacturers Airbus and Boeing do not expect a reversal of the trend until the second half of 2010.
Following the record spending in the security and defense technology industry last year, the SIPRI expects to see another increase in 2009; primarily in the USA and China.
The results achieved by the Jenoptik Group in the 1st half-year do not necessarily allow us to make predic tions about the further development of business. All the information provided here is subject to there being no further deterioration in the economic situation or a slight recovery. Statements on the future development of the business situation have been given on the basis of current information. In view of the current economic situation and as a result of the continuing uncertainty surrounding the economic development, definitive forecasts for the 2009 and 2010 fiscal years can only be provided to a limited extent, more precise details cannot be given at this point in time.
The course of the further business development by the three segments is based on the following assumptions:
Lasers & Optical Systems segment: A slight easing of the crisis in the semiconductor industry starting from the second half of 2009 is more likely according to statements in the sector, so Jenoptik is also expected to see a slight pickup in business in the 2nd half-year 2009 (in the 4th quarter). In addition, positive effects
on earnings are expected from the 2nd half of the year resulting from the relinquishment of the business with mid-format cameras, which showed a loss in the current business, as well as from the transfer of the production at the Gießen site to Jena. For the Lasers & Material Processing division, we anticipate an overall slight reduction in the volume of business, although the medical technology business will show a positive development. In addition, the EBIT of the Lasers & Optical Systems segment is also being burdened by the one-off effects in the sum of 7.9 mil lion euros arising from the withdrawal from the mid-format camera business.
Metrology segment: The reduction in the order intake of the Industrial Metrology division since November 2008 intensified at the beginning of 2009 and in the 2nd quarter also remained at a very low level. This will lead to a further fall in sales in the current 2nd halfyear which the smaller but far more stable Traffic Solutions division will be unable to compensate for. Opportunities for the Traffic Solutions division will be created not only from what is an essentially stable market development but also as a result of the complete product range, our position as a global market leader in the equipment business as well as possible new orders in the Traffic Service Providing business. The development of this business is included in the EBIT.
Defense & Civil Systems segment: In view of the high and long-term order backlog there is a relatively high level of planning certainty for the development of sales and results. Jenoptik will supply components and subsystems in the sum of about 70 million euros to the new and modern infantry fighting vehicle of the German Army, this sum was not included in the order backlog as at June 30, 2009.
In the full year 2009 the Jenoptik Group will not achieve the level of sales and results posted in 2008. However, as described above, the extent of the problematic sales conditions varies within the segments.
Even in this year's difficult environment, Jenoptik will continue to benefit from the stable business of the Defense & Civil Systems segment, where we expect a further contribution to sales in 2009 of more than 200 million euros (2008: 208.5 million euros). We also anticipate a relatively stable development of sales in the Traffic Solutions division (Metrology segment). However, as a result of a fall in demand, we predict markedly lower sales in 2009 in the Optical Systems and Industrial Metrology divisions compared with the 2008 fiscal year. Therefore, Jenoptik forecasts Group sales of between 460 and 500 million euros for the full fiscal year 2009.
The group results from operating activities will be shaped both by a market environment in which there is intensive competition as a result of the economic crisis and by the anticipated reduction in the volume of sales. Thanks to the stable contribution from the Defense & Civil Systems segment as well as our presence in various markets, we do however expect a positive group EBIT before one-off effects. Neverthe less, as a consequence of the economic crisis, the possi -
bility of additional one-off effects impacting on the results cannot be ruled out – for example customers or suppliers experiencing financing bottlenecks or one-off expenses as the result of measures taken within the Jenoptik Group to reduce costs and increase efficiencies.
On the order book side, Jenoptik will benefit from its presence in various markets. In the 1st half-year 2009, order intakes from the semiconductor industry showed signs of a bottoming out. Order intakes from the automotive industry posted a further sharp fall in the 1st quarter 2009 but stabilized at the low level in the 2nd quarter. By contrast, defense and security technology as well as traffic solutions both recorded virtually unchanged order intakes. Since order intakes in the double figure million euro range can arise, particularly in the Defense & Civil Systems and Traffic Solutions divisions, these cannot be predicted with sufficient probability and it is therefore impossible to give reliable statements on the level of the order intake and consequently also of the anticipated order backlog.
The personnel numbers in the Jenoptik Group is ex pected to fall over the full year 2009. Against the background of the continuing economic development, the number of employees will be kept continually under review dependent upon the situation. Some adjustments to personnel capacities have already been made through the reduction in overtime and temporary working as well as through the introduction of shorttime working. The relinquishment of the business with mid-format cameras as well as the planned closing of
the optics site in Gießen will have effects in the 2nd half-year 2009. However, Jenoptik's fundamental aim is to keep hold of qualified employees.
In addition to cash and bank credit balances and current securities in the sum of 15.3 million euros as of June 30, 2009, for its financing the Group also has unused lines of credit in the sum of approx. 87.6 mil lion euros. Some of these have been used to re finance the convertible bond in July 2009. Negotiations are current ly being held for the take-up of long-term credits, in order to shift the Group's financing from current to non-current. A part of the financing was already successfully shifted in the 1st half of the year. By applying for a state guarantee Jenoptik intends to secure a part of the remaining non-current financing. The Group's target is to increase the portion of noncurrent financial liabilities to more than 80 percent by the end of the year.
-- Jenoptik expects a positive Group EBIT before one-off effects for the full year 2009.
| in TEUR | 1.1. – 30.6. 2009 | 1.1. – 30.6. 2008 |
|---|---|---|
| Sales | 231,326 | 264,453 |
| Cost of Sales | 169,088 | 188,041 |
| Gross profit | 62,238 | 76,412 |
| Research and development expenses | 15,714 | 15,281 |
| Selling expenses | 26,608 | 28,432 |
| General administrative expenses | 17,961 | 18,908 |
| Other operating income | 8,162 | 10,014 |
| Other operating expenses | 6,831 | 7,721 |
| EBIT before one-off effects | 3,286 | 16,084 |
| One-off effects* | – 7,892 | 0 |
| EBIT | – 4,606 | 16,084 |
| Result from investments in associated companies | – 898 | – 290 |
| Result from other investments | – 724 | – 1,457 |
| Interest income | 854 | 1,407 |
| Interest expenses | 5,972 | 7,493 |
| Financial result | – 6,740 | – 7,833 |
| Earnings before tax | – 11,346 | 8,251 |
| Income taxes | 62 | 1,008 |
| Deferred taxes | – 344 | 929 |
| Earnings after tax | – 11,064 | 6,314 |
| Minority interests' share of profit/loss | 1,501 | 1,557 |
| Net profit | – 12,565 | 4,757 |
| Earnings per share in euros | – 0.24 | 0.09 |
| Earnings per share (diluted) in euros | – 0.24 | 0.09 |
*One-off effects include other operating expenses in connection with the relinquishment of the mid-format camera business.
| June 30, 2009 | Dec. 31, 2008 | Change |
|---|---|---|
| 361,496 | 376,335 | – 14,839 |
| 83,640 | 88,929 | – 5,289 |
| 163,820 | 170,489 | – 6,669 |
| 34,372 | 34,794 | – 422 |
| 1,162 | 1,358 | –196 |
| 17,296 | 18,802 | – 1,506 |
| 9,113 | 10,589 | – 1,476 |
| 52,093 | 51,374 | 719 |
| 302,556 | 312,764 | – 10,208 |
| 179,057 | 179,450 | – 393 |
| 108,216 | 118,832 | – 10,616 |
| 1,495 | 1,959 | – 464 |
| 13,788 | 12,523 | 1,265 |
| 664,052 | 689,099 | – 25,047 |
| in TEUR | June 30, 2009 | Dec. 31, 2008 | Change |
|---|---|---|---|
| Shareholders' equity | 279,915 | 292,837 | – 12,922 |
| Subscribed capital | 135,290 | 135,290 | 0 |
| Capital reserves | 186,137 | 186,137 | 0 |
| Other reserves | – 64,926 | – 50,507 | – 14,419 |
| Own shares | 23,414 | 21,917 | 1,497 |
| Non-current liabilities | 148,138 | 133,114 | 15,024 |
| Pension provisions | 6,432 | 6,437 | – 5 |
| Other non-current provisions | 16,292 | 18,370 | – 2,078 |
| Non-current financial liabilities | 109,887 | 92,418 | 17,469 |
| Other non-current liabilities | 12,842 | 12,967 | – 125 |
| Deferred tax liabilities | 2,685 | 2,922 | – 237 |
| Current liabilities | 235,999 | 263,148 | – 27,149 |
| Tax provisions | 2,605 | 2,934 | – 329 |
| Other current provisions | 31,862 | 35,751 | – 3,889 |
| Current financial liabilities | 93,881 | 113,684 | – 19,803 |
| Other current liabilities | 107,651 | 110,779 | – 3,128 |
| Total shareholders' equity and liabilities | 664,052 | 689,099 | – 25,047 |
Statement of comprehensive income.
| in TEUR | 1.1. to 30.6.2009 | 1.1. to 30.6.2008 |
|---|---|---|
| Earnings after tax | – 11,064 | 6,314 |
| Differences from currency translation | – 302 | – 1,110 |
| Available-for-sale financial assets | 97 | – 779 |
| Cash flow hedge | – 1,653 | 991 |
| Total income | – 12,922 | 5,416 |
| of which attributable to: | ||
| Minority interests | 1,501 | 1,557 |
| Shareholders | – 14,423 | 3,859 |
Consolidated statement of movements in shareholders' equity.
| Reserves | ||||||
|---|---|---|---|---|---|---|
| in TEUR | Subscribed capital |
Capital reserve | Cumulated profit |
Available for-sale financial assets |
Cash flow hedge |
|
| Balance as at 01.01.2008 | 135,290 | 186,726 | – 65,550 | – 6 | 6,229 | |
| Valuation of financial instruments | – 779 | 991 | ||||
| Currency differences | – 46 | |||||
| Earnings after tax | 4,757 | |||||
| Dividend payments | ||||||
| Balance as at 30.06.2008 | 135,290 | 186,726 | – 60,839 | – 785 | 7,220 | |
| Balance as at 01.01.2009 | 135,290 | 186,137 | – 53,776 | – 1,888 | 6,552 | |
| Valuation of financial instruments | 101 | – 1,653 | ||||
| Currency differences | 124 | |||||
| Earnings after tax | – 12,565 | |||||
| Balance as at 30.06.2009 | 135,290 | 186,137 | – 66,217 | – 1,787 | 4,899 |
| Cumulative currency differences |
Minority | Total |
|---|---|---|
| – 3,399 | 21,634 | 280,924 |
| 212 | ||
| – 1,064 | – 1,110 | |
| 1,557 | 6,314 | |
| – 517 | – 517 | |
| –4,463 | 22,674 | 285,823 |
| –1,395 | 21,917 | 292,837 |
| – 4 | – 1,556 | |
| – 426 | – 302 | |
| 1,501 | – 11,064 | |
| –1,821 | 23,414 | 279,915 |
Consolidated statement of cash flows.
| in TEUR | 1.1. to 30.6. 2009 | 1.1. to 30.6. 2008 |
|---|---|---|
| Earnings before tax | – 11,346 | 8,251 |
| Interest | 5,118 | 6,086 |
| Depreciation / write up | 14,299 | 16,226 |
| Impairment | 6,289 | 0 |
| Loss / profit on disposal of fixed assets | 41 | – 68 |
| Other non-cash expenses /income | 1,008 | 833 |
| Operating profit / loss before working capital changes | 15,409 | 31,328 |
| Increase / decrease in provisions | – 7,073 | – 5,615 |
| Increase / decrease in working capital | 6,114 | – 6,254 |
| Increase / decrease in other assets and liabilities | – 1,547 | – 2,254 |
| Cash flow from / used in operating activities before income taxes | 12,903 | 17,205 |
| Income taxes paid | – 377 | – 748 |
| Cash flow from / used in operating activities | 12,526 | 16,457 |
| Receipts from disposal of intangible assets | 36 | 142 |
| Payments for investments in intangible assets | – 2,533 | – 2,844 |
| Receipts from disposal of tangible assets | 395 | 3,416 |
| Payments for investments in tangible assets | – 5,236 | – 7,384 |
| Receipts from disposal of financial assets | 1,253 | 3,002 |
| Payments for investments in financial assets | – 1,550 | – 2,664 |
| Payments for acquisition of consolidated companies | 47 | 42 |
| Interest received | 856 | 997 |
| Cash flow from / used in investing activities | – 6,732 | – 5,293 |
| Payments to minority shareholders | 0 | – 517 |
| Receipts from issue of bonds and loans | 27,420 | 11,339 |
| Repayments of bonds and loans | – 30,017 | – 3,256 |
| Repayments for finance leases | – 403 | – 11,012 |
| Change in group financing | 749 | – 6,139 |
| Interest paid | – 1,885 | – 2,534 |
| Cash flow from / used in financial activities | – 4,136 | – 12,119 |
| Change in cash and cash equivalents | 1,658 | – 955 |
| Foreign currency translation changes in cash and cash equivalents | – 393 | – 544 |
| Cash and cash equivalents at the beginning of the period | 12,523 | 13,792 |
| Cash and cash equivalents at the end of the period | 13,788 | 12,293 |
January 1, – June 30, 2009
(previous year's figures in brackets)
| in TEUR | Lasers & Opti - cal systems |
Metrology | Defense & Civil Systems |
Other, Consolidation |
Group |
|---|---|---|---|---|---|
| Sales | 74,075 | 47,994 | 105,182 | 4,075 | 231,326 |
| (107,636) | (53,857) | (100,672) | (2,288) | (264,453) | |
| of which Germany | 22,526 | 18,576 | 55,199 | 4,238 | 100,539 |
| (36,593) | (20,701) | (57,481) | (2,429) | (117,204) | |
| European Union | 21,796 | 10,717 | 31,005 | 0 | 63,518 |
| (36,288) | (12,083) | (23,917) | (0) | (72,288) | |
| Other Europe | 3,245 | 2,921 | 9,355 | 0 | 15,521 |
| (2,782) | (3,495) | (8,952) | (0) | (15,229) | |
| NAFTA | 19,050 | 8,796 | 3,598 | – 163 | 31,281 |
| (16,298) | (8,792) | (4,610) | (– 141) | (29,559) | |
| South East Asia/Pacific | 5,154 | 3,567 | 5,777 | 0 | 14,498 |
| (7,660) | (7,335) | (4,788) | (0) | (19,783) | |
| Other | 2,304 | 3,417 | 248 | 0 | 5,969 |
| (8,015) | (1,451) | (924) | (0) | (10,390) | |
| EBIT before Group charges, before one-off effects | –1,784 | – 3,194 | 8,018 | 246 | 3,286 |
| EBIT (prev. year) | (12,067) | (–987) | (5,430) | (–426) | (16,084) |
| Group charges | –1,268 | –738 | – 1,068 | 3,074 | 0 |
| One-off effects | –7,892 | 0 | 0 | 0 | –7,892 |
| EBIT after Group charges, after one-off effects | – 10,944 | – 3,932 | 6,950 | 3,320 | – 4,606 |
| EBITDA before Group charges, after one-off effects | 1,924 | –1,252 | 11,379 | 2,901 | 14,952 |
| EBITDA (prev. year) | (19,793) | (791) | (8,706) | (1,379) | (30,669) |
| Result from investments in associated companies | –898 | 0 | 0 | 0 | – 898 |
| (– 290) | (0) | (0) | (0) | (– 290) | |
| Result from other investments | –958 | 107 | 124 | 3 | – 724 |
| (– 1,525) | (40) | (22) | (6) | (– 1,457) | |
| Research and development expenses | 7,119 | 4,389 | 4,515 | –309 | 15,714 |
| (8,860) | (5,198) | (2,963) | (– 1,740) | (15,281) | |
| Free cash flow (before income taxes) | 398 | 1,936 | 4,639 | – 1,408 | 5,565 |
| (5,654) | (–1,164) | (5,311) | (733) | (10,534) | |
| Working capital** | 54,654 | 42,261 | 102,932 | – 4,147 | 195,700 |
| (59,024) | (48,125) | (100,285) | (– 5,816) | (201,618) | |
| Order intake | 80,124 | 40,108 | 94,267 | 3,623 | 218,122 |
| (112,454) | (65,785) | (86,995) | (2,349) | (267,583) | |
| Tangible assets, investment properties and intangible | 100,675 | 20,101 | 39,458 | 121,598 | 281,832 |
| assets** | (109,949) | (20,986) | (40,241) | (123,036) | (294,212) |
| Investments excluding company acquisitions | 2,669 | 1,195 | 2,674 | 1,231 | 7,769 |
| (5,326) | (1,929) | (2,946) | (27) | (10,228) | |
| Depreciation and amortization | 11,600 | 1,942 | 3,361 | 2,655 | 19,558 |
| (7,726) | (1,778) | (3,276) | (1,805) | (14,585) | |
| Employees | 1,321 | 773 | 1,035 | 132 | 3,261 |
| (without trainees) | (1,378) | (806) | (1,045) | (62) | (3,291) |
* EBITDA = Earnings before interest, taxes, depreciation and amortization
** Previous year's figures as at December 31, 2008.
The consolidated financial statements were prepared in accordance with the International Financial Reporting Standards (IFRS) published by the International Accounting Standards Board (IASB) and the interpreta tion of these standards by the International Financial Reporting Interpretations Committee (IFRIC).
The consolidated financial statements of JENOPTIK AG have been prepared in accordance with § 315a HGB (German Commercial Code) in line with the rules of the IASB with an exemption from preparation of consoli dated financial statements under HGB. At the same time the consolidated financial statements and group management report are in line with the European Union Directive on Consolidated Accounting.
In the consolidated interim report ("interim report") as at June 30, 2009, prepared on the basis of the International Accounting Standard (IAS) 34 "Interim Reporting", the same accounting methods were used as in the consolidated financial statements for the fiscal year 2008. These were prepared in accordance with the International Financial Reporting Standards (IFRS) which have to be applied for reasons of comparison within the European Union. These methods are pub lished individually and described in detail in the Notes to the Annual Report 2008. The Annual Report can be called up on the Internet at www.jenoptik.com, on the Investors page under the heading Accounts & Reports/ Downloads.
The interim report was prepared in the group currency of the Euro and the figures are stated in TEUR unless specified otherwise.
In the opinion of the management these consolidated interim financial statements include all necessary standard adjustments to present a true and fair view of the development of the business of the company in the periods under report. The consolidated interim financial statements were reviewed.
The consolidated financial statements include 20 (prev. year 21) domestic and 10 (prev. year 10) foreign companies fully consolidated. In accordance with IAS 31 "Interests in Joint Ventures" 1 (prev. year 1) joint ven ture company is included in the quarterly report proportionally at 50% and, under IAS 28 "Interests in Associates" 2 (prev. year 2) domestic associated companies are shown at equity.
During the first half 2009 as well as in the correspond ing period in 2008 the Group of JENOPTIK AG had no business transactions with related companies.
| Tangible assets | in TEUR | |
|---|---|---|
| 30.6.2009 | 31.12.2008 | |
| Land and buildings | 93,677 | 95,635 |
| Technical equipment and machines | 39,820 | 44,548 |
| Other equipment, factory and office | ||
| equipment | 22,230 | 23,752 |
| On-account payments and assets under | ||
| construction | 8,093 | 6,554 |
| 163,820 | 170,489 |
| Inventories | in TEUR | |
|---|---|---|
| 30.6.2009 | 31.12.2008 | |
| Raw materials and supplies | 63,243 | 67,314 |
| Work in progress | 95,071 | 90,376 |
| Finished goods and merchandise | 20,743 | 21,760 |
| 179,057 | 179,450 |
| Accounts receivable and other assets | in TEUR | |
|---|---|---|
| 30.6.2009 | 31.12.2008 | |
| Trade accounts receivable | 78,089 | 93,389 |
| Receivables from construction contracts | 8,512 | 4,400 |
| Receivables from non-consolidated | ||
| affiliated companies | 3,063 | 3,390 |
| Receivables from participating interests | 1,945 | 2,792 |
| Other assets | 16,607 | 14,861 |
| 108,216 | 118,832 |
| Non-current financial liabilities | in TEUR | |
|---|---|---|
| 30.6.2009 | 31.12.2008 | |
| Non-current bank liabilities | 106,025 | 88,241 |
| Non-current liabilities from finance leases | 3,862 | 4,177 |
| 109,887 | 92,418 |
| Current financial liabilities | in TEUR | |
|---|---|---|
| 30.6.2009 | 31.12.2008 | |
| Current bonds | 47,920 | 48,258 |
| Bank liabilities | 45,321 | 64,697 |
| Liabilities from finance leases | 640 | 729 |
| 93,881 | 113,684 |
| Other current liabilities | in TEUR | |
|---|---|---|
| 30.6.2009 | 31.12.2008 | |
| Liabilities from on-account payments | ||
| received | 27,446 | 33,825 |
| Trade account payable | 40,443 | 41,289 |
| Liabilities from construction contracts | 2,069 | 507 |
| Receivables from non-consolidated | ||
| affiliated companies | 2,021 | 2,009 |
| Liabilities to participating interests | 2,674 | 2,623 |
| Other current liabilities | 32,998 | 30,526 |
| 107,651 | 110,779 |
The current declarations under § 161 AktG (German Stock Corporation Act) by the Executive Board and Supervisory Board relating to the German Corporate Governance Code have been made available to the shareholders at all times via the JENOPTIK AG Internet site. The declaration can also be viewed at JENOPTIK AG.
JENOPTIK AG and the one or the other of its group companies are involved in several legal or arbitration proceedings. If these could have a substantial effect on the Group's economic situation, these are described in the consolidated financial statements of Jenoptik for the year 2008.
There were no events of special importance occurring after the period covered by the interim report.
To the best of our knowledge, and in accordance with the applicable reporting principles for interim financial reporting, the interim consolidated financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group, and the interim management report of the Group includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal opportunities and risks associated with the expected development of the Group for the remaining months of the fiscal year.
Jena, August 6, 2009
Dr. Michael Mertin Frank Einhellinger Chairman of the Member of the
Executive Board Executive Board
August 13, 2009 Interim Report on the first half 2009
November 10, 2009 Interim Report on the 3rd quarter 2009
March 2010 Annual Report 2009
Investor Relations Steffen Schneider Phone ++ 49 (0) 3641 65-2244 Fax ++ 49 (0) 3641 65-2804 E-mail [email protected]
Katrin Lauterbach Phone ++ 49 (0) 3641 65-2255 Fax ++ 49 (0) 3641 65-2484
These and other publications of Jenoptik are available at www.jenoptik.com
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